Earnings call transcript Q1 2023

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Operator

Good afternoon. And welcome to the Anywhere Real Estate First Quarter 2023 Earnings Conference Call via webcast. Today's call is being recorded and a written transcript will be made available in the Investor Information section of the company's website tomorrow. A webcast replay will also be made available on the company's website.

At this time, I would like to turn the conference over to Anywhere Senior Vice President, Alicia Swift. Alicia. ahead, go Please

Alicia Swift

Good conference welcome Estate. call Rihanna. quarter the XXXX earnings for morning you, to and first Thank Anywhere Real

the Financial today Ryan me call CEO On President, and are Schneider; Charlotte Officer, Anywhere, Chief Simonelli. and with

and the statements As the be the are future and based company its during statements expectations presentation, other shown on about X forward-looking statements the this will environment. Slide results on current of economic making call. current These

significant of economic, projections and and and are made among incurrence to that in connection the other which inherently estimates of pending others And litigation, statements, uncertainties, payments are competitive, in with subject excess contingencies, are Forward-looking regulatory, beyond management, industry of amounts many of developments. or litigation. liabilities the macroeconomic control including accrued

materially specified our differ could factors and those our from those forward-looking from Important as SEC well implied in to materially annual expressed issued that statements. forward-looking in and in filings. differ in may quarterly the results earnings are Actual release the today, assumptions as cause results actual or statements

to subsequent listen earnings are May the as and today, of been we remind this who initial you made that of those For Xrd not have herein to presentation, the the updated remarks rebroadcast call.

turn Schneider will call I the CEO Ryan our Now over and President, to

Ryan Schneider

growth, to for owned across focused our luxury, capture Anywhere the the invest in future businesses company Alicia. XXXX, we to cost we integrated more you, greater economics. execute our of charge to experience continues our ahead million In on especially We and that market, greater cost of successes create retention, with Good franchise we and permanently changing setting lowered in specific estate the positioning existing $XXX continue agent and the great agent housing year. our up brands. in future. Thank as afternoon, meaningful quarter challenging how everyone. work face us and Even success reimagining the stayed real and operate for transaction lets a a brokerage And savings we simpler, first to make progress, recruiting for in franchise in consumer base, including significantly sales also even

for on to more but tough stays environment by great in employees, thanking share ever. later a and laser named Anywhere from got focused, company priorities, the energy driving helping an navigate will strategic call, of a Fortune's that intense our one agenda. spirit, of I each our these being innovation time including start the I lot first agents franchisees for Innovated Companies want of customers In most as our our

would fact positive indicators the going believe improve throughout portfolio. optimism few we the Now, which time. there's And no business performed of year. are we turning market our one from right in range, forward. the very the greater will agents QX, to midst hear year. our franchisees low Most And seen in a worst have housing X market, still to of million expectations. those the forecasts the years for we've predict we about hiding a sales starting some the home the from And in of I'm year-over-year improving in challenging and be a volume long around In comparisons

which $XX decline The down we was in decline a almost delivered you. all homesale in XX%, driven with volume in when savings about We of volume to million XX% quarter units. tough was advance a cost unit signaled of both

operating about X% significant prior EBITDA markets, Revenue York geographic large all While ones price year, versus increase revenue. to versus had was there hold A billion $⁠XX markets, was prices down substantially variation steady across few while minus last changes. or City in saw Texas New of down thirds was like states, in and particular Florida million. were year two homesales California, the prices even including over XX% and $X

by was new in EBITDA meaningfully quarter. the operating our legal However, accruals impacted

year, As large second antitrust in Jury a in industry was transaction reminder, addition certified March. to this trials other class two a the action later

solidly pleased legal were accruals that Now March we operating aside, EBITDA positive. was

We trend to expect that continue.

We are see far April trend also closed outperform our volume to QX, volume than running in metrics continuing of glad closed continuing to better And future metrics numbers which volume the volume for volume indicates positive metrics. open open so metrics levels. are

up strategic greater markets. progress housing especially our success, are stronger most We to us future in for excited about set

the business working focus So hard with particular our market Anywhere our first, we're leadership. position a to as luxury franchise growth, and on rebounds especially share achieve to

Our and year-over-year, Anywhere have levels. to continue agent Advisors agent grew we base record retention again

sales Our and business technology, see franchise compelling continue robust programs. both products, is to brands proposition our and quality generation we and that attracted high delivering agents to innovative domestically data marketing and internationally, value brokers and lead includes Anywhere

are a permanently we our to base. Second, moving lower cost business

cost we footprints to are our from and we our title This real see serve agents, recent improve and QX operations. together as and our transaction bring costs brokerage can our XXXX, of rearchitecting automating reducing better and footprint the and our lower most and experience. actions estate in XXXX you results operations includes As physical

consumer and since capturing and third, benefits, from the will agents this integrate the and simplify experience. few goal include the And agent consumers, further including quarter. the the friction transaction believe franchisees. to to in our continue A progress following economics we transaction for examples stress invest and and multiple We reducing additional have make and

agent economics. by our provides us to solution simplifying value RealVitalize for to adds capture the Our a product and sellers prepare home transaction help additional enables their turnkey experience sale. and consumers proposition This to

they Leads are in shorten where the ongoing QX and buying journey. consumers We've in even with to RealVitalize their successful of more controlled time Engine the is broadly interested scaled product agents. owing to in on consumers we our of consumers earlier title home our which meet XX% of transactions part example seller captured matching effort Engine markets. speeds and for process over selling and the agents connect So Leads up up with simplifies

a ordering which Banker click and XX% near One QX Click and across single CBR suggests our operations. Realty as in Coldwell to of transactions the simplifies close last the use and agents Title the feature. in title Launched our integrates name year process who brokerage title

and better later to the integrated transaction, integrating program reach is live addition our an our and title finally its Title, multi Title to of by next in One our our joint year. new automating and part in of title the complex our This Florida end and franchise of in track Click how So franchisees title allows offering venture on extends work went market, franchised first the our changing California Upward launch benefit we from is of Pennsylvania scale transaction and also this program a to markets network. to example

we're the of in a continued how delivery, markets. clearly in and ahead progress, to team's Anywhere us, midst this tough our opportunities further our strategic track of So, housing the housing position to record stronger of moment I'm market, excited seizing especially by capture

I turn Charlotte discuss our in to Now over to results will more detail.

Charlotte Simonelli

everyone. afternoon, Good

and We to to when and industry market and improves. quarter control, focus Given what the financial differentiated executing the housing we we us cost believe dynamics, and operational will leadership in strategic emerge against continue the stronger savings performance on goals. can focus enable market our execution, our drive first our performance had strategic solid and

and the quarter billion our due agent XX% with QX was transaction commission first highlight higher I and prior versus in financial versus was volume down volume operating year results. our enterprise. $XX lower million, year transaction across Now part QX by to decline. down savings EBITDA offset $X.X in revenue line costs, cost will negative prior

Our results by were significant the also to legal earlier. accruals Ryan impacted referred

We was million negative is QX at end of better $XXX are cash what normally quarter, seasonally flow our in cash. on Cash prudently the the million. managing This our was free than we QX $XXX first see and hand result slowest.

$XX the of yearend end higher cash was than the by quarter capital. driven million working only at better borrowing revolver management prudent $XXX and our and XXXX million, Our

borrowings maturities in leaves year, Also, note did November the XXXX. with we relate redemption almost revolver our all until limited last to which us of

detail more business performance. now our on segment And go me let into

Brands revenue decreases volume declines, leads costs. operating in marketing to by generated EBITDA. million Our decreased operating year-over-year, $XX and million $XX business, which related Operating EBITDA partially offset and primarily transaction lower to Anywhere includes relocation, in due

year Splits agents worse retention the we were the prior amortization the of we've to a down than commission recruiting costs, agent Advisors and splits was past mix due Anywhere in over XX and of operating negative better to the year. versus EBITDA volume, due much QX operating higher which lower lower and Commission year-over-year, points in by was million, million prior $XX part year $XX Our offset and the lower due prior payments QX up volume impact quarter. basis over expenses. expected of marketing recruited were than to in

due $X And earnings GRA initiatives. title volumes, improved was cost $X million and operating to new by EBITDA timing It business. to business. purchase in by Services negative offset development Anywhere in million year-over-year the expenses corporate lower also Integrated was in million QX. was operating our partially and declined underwriter EBITDA lower $XX sale lower due to This JV savings impacted of due refinance Operating our million on $XX performance.

how Moving on efficiency. focus to to a we we drive have our operate on changing cost, relentless company greater

remainder to and XX% first execute XXXX cost be realizing in the fairly headcount from $XX expect representing million We across of real our efficiencies savings footprint savings. quarter, The come the of million program, the of of estate the our majority savings year. the continue to $XXX balance this evenly recognized on and will about

since reduced our by June have XX% headcount of We XXXX.

our integrated the are how title and and These agents transform customers estate mortgage. reimagine by and transaction more focusing and advancing deliver our technology like services to our are be estate efficiencies. product which footprint, offices drive and flexible On efficient, efforts on solutions, real focused we real to efforts we to with services brokerage

quarter, resulted examples. first in of these In Realty of couple Banker offices in about XX%. our reduction the a Coldwell A efforts

separately, to consumers, transaction agents how simplifies We timelines, and end but brokerage, expanding to have and brokerage integrate and the user we change This services our now will deliver the This historically opportunity operations. shortening improving value operated are focused administrative title on the for experience. proposition.

This drive eliminating leveraging redundancies. streamline in by title work and and now efficiencies done those brokerage, previously and operations had also both will that been

also targeting spending. ROI are We higher

Football. reach return our by The two and for to doubles to are savings the thirds integrations. be in offset Night dollar savings and moving example, For March We offers part same show investment mentioned Ryan These permanent Prime not we year branded litigation by inflation and intensifying full of costs our driven expected when volumes and cases by increase. away from previously. Video to be retargeting consider and will advertising are opportunities Madness Thursday in approximately Amazon

new our onto Now estimates XXXX. for

volumes First, our closed to XX% about expect versus year. QX down we be prior

split XXXX previous basis year of full that expect now better as is we about which trends, remain than split XXX pressure estimates. our call. QX the our on last Estimates same based Second, points, the

about transaction For full year forecasts. to year-over-year, continue with consistent XXXX, estimate and expect is volume we industry in XX% which with XX% to our line to past declines

year. We also sequentially improve still expect volumes throughout transaction will the

working modestly in We be to operating help savings free management positive, tough will cash this flow housing. as and expect discipline our year our cash favorable robust programs counterbalance capital,

savings Finally, cost XXXX. P&L are to track we on realize million of $XXX in

the Let turn me closing for call back some to remarks. Ryan now

Ryan Schneider

Thank you, Charlotte.

differently, the cost environment So, we for and the quarter base excited market our up transaction business the to first of greater tough in the made team reimagine and housing when about to growth also the operate progress I'm agent reflect deliver. proud experience. customer streamline on set I'm and to navigated as rebounds, I how quarter, the if we our our strategic permanently

capture to to we and in housing next. improve real about believe together even continue moment to optimistic will greater I franchisees, better market that To seize it. in with continue ahead, future, the success Looking the the over we And term remain the benefits through housing this of our estate achieve the agents move our to to ability year. medium environment, quite of the housing course and market as we lead position the what's Anywhere to

for operator any the Now over call I'll questions. back the turn to

Operator

Instructions] [Operator

Tommy with McJoynt Your comes first KBW. question from

Tommy McJoynt

Hey. taking Good Thanks the evening, questions. guys. for

asking start commission to the off about number. want I So split

full that a up range this year down to XX% assuming what was full last where can that relative volumes end I productivity could understanding vary, So commission to think among year you that agents XX%, what's the it the year split guided for for the reasonable transaction and mix are year. to

Charlotte Simonelli

Yes.

that well guidance as amortization that the And the year. the past retention drivers around points is being remarks pressure the of I prepared prior I to year, payments, of what's recruiting So agents the recruited and the indicated mix the split the than as in be causing some of the we've worse basis think again, XXX over first just prior down was quarter XX. of

for the in year at are to XXX, full drivers about be is those So And XX close points basis call big QX. point the our down down to this XXX.

Tommy McJoynt

it. Right. Got

a Okay. banks that's my question. in Have the that And of you following available housing impacting the some by slowdown second luxury that credit indications pretty were pullback in prominent then any jumbo early mortgage historically of market? market seen the

Ryan Schneider

No, we have not.

that is in sized so mortgage the we with, seen haven't the many has we We've and the It's near disproportionate up are transactions the anywhere some pressure not market into mortgage top getting the meaningfully list. there. fact affecting issue a not the particular seen than amount comes broad and of mortgage a housing so luxury to we're not a of the of have kind we're Our venture. differently comes rate the list people that and with of both banks segment little of kind of of massive kind business number, rest of their any transactions, market right, et X% joint on our homes housing inventory low a in affordability in the the even is frankly, of distribution rates that a has in and mortgage because on because credit But the on of pressure pricing, things majority bigger so look, But rates. and the something out on results mortgage do and results of X% bank, cash that supply than pretty relative market. is jumbo operate the locked housing are Obviously, pullbacks. pullback cetera, the

given in driver, of going So we there But the question of on. believe industry. the is out that's not our it results or good everything results either a

what those the it's credit a And environment. loose environment And outlook it's rate housing we with housing right for but again, year affecting have the no terms XX tough have think optimistic don't ago because a term but demographics. your now results. medium balance that fact in over years for of issues of we're We the question on longer pretty us not does the seeing term, what's sheet our of strong more and

Operator

with Your Barclays. from next comes Bouley question Matthew

Matthew Bouley

the evening, good everyone. questions. Thank taking you Hey, for

legal includes on So I know holding guess those I I G&A of didn't speaking accruals to. I way. if of EBITDA. some quantify if you're sort normalized about you. to the those back, but that want guess add you kind And G&A spend, back set spend of that think a kind presumably adjusted you these meaningful to of don't Thank a ongoing? know of it? maybe to Maybe or there you're Is way to put that another level way

Ryan Schneider

operating that make talk just in try we and a to the out, about and EBITDA legal that Well, it's point, adjust it look, it And accruals in row meaningful our don't had that is them this we but three EBITDA. your we to clear bluntly, meaningful. quarters put we've affect that we

pretty but transparent impact. them about where meaningful obviously there a is you run numbers things, our be right, of in sharing shows that want you're those should because partly on lower it's G&A a our been have would and EBITDA that us stuff the basis up. you that wouldn't been higher. not would assuming have business going are the lion the plaintiffs, So giving We're rate on going with to that the out, get we be shares to and what's absent And

Charlotte Simonelli

looked kind where mean of the savings with longer and cost period from, corporate Yes, of at over which you've come of and our G&A think, our majority out I time coming a I are of probably Matt, title. brokerage

rate you for would I yourself run corporate be. probably you can So estimate what think the G&A think of

Ryan Schneider

go Matt, The quoted. straight mind obviously was look for positive. other aside, results, March how It you thing us. probably was legal they hit operating solidly kind number we keep accruals when But the in EBITDA of EBITDA positive the month that accruals to into a legal at the

there. metrics that. a closed this better March that's like outperform the month better And kind which ones, future was We month like the open is we've year, seen far than every months partly shows the we of then underlying so volume the fact that February. So trend And than January, previous. why transactions

there's we that. solidly So those these accruals have that you have be is been clear of numbers business stronger an sharing with really been just underlying the a March basis. headwind to EBITDA, to one But that example performance some overall of there. positive And we've with on tried

Matthew Bouley

second before And legal how to maybe of we I for? it. quarters my Got accrual any more could on get look question, many Yes. color

Charlotte Simonelli

Yes.

obviously at we today. But guess class cases month. have we we're what mean, continue prudent, month this as keep have to for position was but point a of so these was do So by took we're to reevaluate to we accrued that best I month. sort thought it the our and to of certified, watching going is evolve. month by And

Matthew Bouley

Thank secondly, Okay, evolving. And that just of kind for housing how then it. helpful detail. so got is question this you overall market on all

seeing thing one of think you see the larger And new that more data family build. look of single the as is share I'm I thinking this you're towards shift sort in side. you

development new So for not that do in Corcoran, really asking you business about the guys example.

from how play And new about new think maybe extent rate? Anywhere's plays commission to that you would you. single Thank perspective, in commission how your even participate family do as construction, splits or construction? out either what that So agents into

Ryan Schneider

to markets the markets are are their we're our a would play agents bluntly. single hot, episodically, home like new builders family play now right we tougher, Yes, in bit sell When agents need getting don't to when say use -- homes. I construction.

so big people, is, said, a year, resale new would I even a sell agents move million helping or construction the plus guess a thing. I going that that construction a new mix million our in the know. maybe, be overall, or five of number to kind if who plus It's have and are minus homes. say, I much in it's kind We world about move more of because the big don't doesn't never that whatever, That normal good in

our so swamped with what by up is much going to resale And be down world happens either or market. pretty the

can neither to we a going it business of away the it's if for stuff resale agents of the our the kind any up be goes nor take we'll get to is new market but there, make of involvement. So problem in going terms sales

there happening units the the geographies thing like points forecasts, XX hurt XX the reason earlier the now. bigger the whatever that is onto is look forecasts all the But some world. they to and at environment doing X.X, have part I what's as a number said is we'll but it of market. of obviously across far sold. X.X, right new those true price it's terms challenging is the in years and lack issue the rate those of comment, or And whether ability. bringing of out just in can X.X, is sale are X.X, new lowest really And on it's in market you XX numbers And in And has seen the the of the supply market biggest by well are supply

seen year. feeling have good, can And focused on could a cash We are meaningful the stronger we're and the with the like flow perform still more. can that gotten so excited time because do obviously I how in in. you've has we create quality to when may we that drive I is trying to out lot and seeing markets, what market free even think still anything competitive some And to going the doing. we're way positive a through fact EBITDA here. on personal we to invest pull got and That's modestly that how So are we're have side a then environment we're can pretty it. space given flight better, this competition, of navigate some we we belief And even people in stay back having some to in there cost market the our the really be absolutely

Charlotte Simonelli

further I'd our of brought about the explicit I thing modestly is we that to Yes. cash outcomes up litigation. that free possibility The Ryan just on timing positive information of as only or year, be want have flow any in add any the to our no

So you. that's estimates not factored the that we've shared into with

Operator

Instructions] [Operator

Your next question comes from John Campbell with Inc. Stephens

AJ Hayes

in our stepping Hayes Thanks for AJ congrats quarter. and is questions, for the this on Campbell. John Hey, taking

has saw rates brokerage company's called also third own transactions we your from year that that transactions. for last in title brokerages. attached So of of out the a XX-K about longer those Can patch you And XX% stemmed title you you've the seen attach insight rate how you on think that over improvement and do prior provide some take looked term, can years in years? where those in rates? an how you And

Charlotte Simonelli

think point, do years, that we Well, title have, just had our think we business, meaningful and the of that your that, kind love transactions party business improved over any that we've I there. for We doing love To rates stuff of own right? really amount other kind I a out we agents. our not of can, and third in don't stayed there. they've range I frankly, attach mean

And AJ. the and why do talking is I everybody consumer stepping have trying done as appreciate agent experience, to just share just spend you do get in. about way which our very transaction fundamental unlikely I the title that's strong me so done the time the a And you industry to to it's here, forever been different is it way change because a in work. let I we've AJ, I as with attachment, you'll reimagining if much belief, things

does as used as you results a let to actually easier we the one different an actually it changed actually happens way that or product haven't product, But products for to example evidence metric I've people core this the give easier a create And is make capture. RealVitalize it that results how use the home seller, Because home to work where professionals, it's the to prepping takes the and where hands product our we built into agent then any in of But cost using market both for your right? that have at of the title. professional the is it home homeowner that, and And our that seller doesn't is much And a coordination. the change title that it. it closing. that of I transaction get of any the all the sale recoup make and stuff to that fact where the do on the controls

we And get percent rates capture so plus XX there.

a consumer in own only And because with different we are about very thing to rates. is your just capture that's complex better smaller life. do give programs help mortgage that's the kind rates dollar pilot title value kind data good or for get different for can the the the get better zip easier. actually, want we that in RealVitalize want so example to proposition. code, right, roll want we ways and of we of fun it And transaction that I But talk on and partly that wherever simplifying that. more having people service the scale of the big possible And that's my products and or is and thing broadly. finding of way view, And that so don't of to the to we its AJ, way we those capture makes to experiences the in this our at why embed because obvious not points, to product in all really is it can want that an only the of simpler agent actually are to it Making, we things

likely what needle, and do or to is do the we our but what innovation the industry not could doing Just changing it. that move experience, does

got need we we've you so innovation and And that's that gave kind be to we real of agenda driving. quarter the example this

AJ Hayes

really exact Ryan, you've with attach One appreciate in seems maybe rebuilt both I but there, Cordis, the is to after if for and it like it's just well. buried with may, either margin it brand broadly would segment, and It be the rates could RealVitalize. where versus as great the you fallout. Yes, color very spot follow-up, I or pre-pandemic the today if to pandemic driven provide talk obviously a impressive definitely helpful contributions revenue

Charlotte Simonelli

is decent Yes, driven with we noticeable. a the was would relocation by a was, it kind of so perspective year-over-year over that of what a with and of say we volume definitely was I past was of rebound revenue different in It improvement. but gains year, From and a had little business it clients. And good a really the quarter, drove driven couple demand, things. by existing also then share pent-up new a was clients driven new it by bit had it

point, the business, very I healthy. So think is to your

the the when estate agenda. We right and have it on driving were we focused was really business real booming, continued invest to we technology ensure that

performance out, sectors that that for of think some the suffering. if what's I'm say, I you the there year, so with that to relocation, if playing driven come happy are about the sectors are will really by there is balance way challenges And those use of is are

the term, agendas near to worry as own they plans in relocation so about. have their have they different for And may

long existing the and happy with the we've customers, the share contribution new But are from for sure. market built we're business. over that both haul, going very I with that And gains us year-over-year to think benefit

Ryan Schneider

have any the do questions we queue? you, AJ. other Operator, in Thank

Operator

There at time. are this no further questions

Ryan Schneider

call. all are we today. parties the And with wrap we think us All I our shareholders, joining to thank right, other going that for well, interested of

Operator

call. concludes This conference today’s

now You may disconnect.

Anywhere Real Estate (HOUS) 3 May 232023 Q1 Earnings call transcript